LABOR LAW
Arbitration

Hennepin Healthcare System and the American Federation of State, County & Municipal Employees (AFSCME) Union participated in arbitration concerning the hospital’s use of contract workers for periods longer than six months. There were two conflicting provisions of the collective bargaining agreement: one that limited the amount of time the hospital may employ temporary employees, and another that stated, “nothing in this agreement shall prohibit or restrict the right of the employer from contracting with vendors or others for materials or services.” The arbitrator reconciled the conflicting provisions by concluding the hospital violated the agreement by continuing the employment of a temporary worker who performed bargaining unit work for over six months. The district court affirmed the award and the Minnesota Court of Appeals reversed, finding the arbitrator exceeded his authority by issuing an award that did not draw its essence from the parties’ agreement. The union petitioned the Minnesota Supreme Court for review. The Minnesota Supreme Court reversed, holding the arbitrator’s decision met the essence test, which provides that an arbitration award cannot be vacated by a reviewing court if the award draws its essence from the collective bargaining contract. The Minnesota Supreme Court returned the case to the court of appeals to address the hospital’s alternative argument that the arbitrator exceeded his authority by invading the hospital’s inherent managerial rights.

The Minnesota Court of Appeals affirmed the award, holding that although the arbitrator did not expressly address the provision regarding the hospital’s managerial rights, the arbitrator interpreted the collective bargaining agreement to limit the hospital’s ability to subcontract and thus, implicitly determined that the parties agreed to bargain on the subcontracting issue. If the subcontracting issue was bargainable, then it could also follow the grievance process and be arbitrated. The court then applied the essence test to the inherent managerial rights argument. Because the arbitrator determined that the hospital voluntarily bargained on subcontracting and the arbitrator’s decision draws its essence from the parties’ collective bargaining agreement, the hospital’s inherent managerial rights argument was rejected.

Hennepin Healthcare Sys., Inc. v. AFSCME Minnesota Council 5, Union, No. A21-1079 (Minn. Ct. App. Oct. 23, 2023) (nonprecedential opinion).

CONSTITUTIONAL LAW
First Amendment

Dr. Eric Ringsred sued the City of Duluth alleging the city retaliated against him in violation of his First Amendment rights. Describing a long contentious history between himself and the city, among other claims, Ringsred maintained the city retaliated against him for over 20 years, starting in 1998 over an area of town he wished to preserve. The issue culminated in the Duluth Economic Development Authority’s (DEDA) 2016 purchase of land Ringsred forfeited to Saint Louis County because he failed to pay property taxes. Ringsred had tried to buy the property back, but Ringsred asserted DEDA and the city acted in concert to deprive him of the property in retaliation for his speaking out and taking earlier legal action against the city.

Duluth filed a motion to dismiss for failure to state a claim and the district court ruled that the claim was time-barred — or past the statute of limitations — and rejected Ringsred’s reliance on the continuing violation doctrine, citing “lack of continuity” between the alleged retaliatory actions. The court of appeals reversed and reinstated the claim, concluding the alleged retaliatory acts constituted a continuing violation that tolled — paused or delayed the time set forth by — the statute of limitations. Duluth appealed only on the timeliness of the First Amendment Section 1983 retaliation claim. Since neither party disputed the applicable statute of limitations for Section 1983 claims is six years, that limitations period was applied. Ringsred brought his Section 1983 claim against the city in April 2020 and the six-year statute of limitations bars a retaliation claim that is based on alleged retaliatory acts before April 2014, unless the continuing violation doctrine applies.

The Minnesota Supreme Court defined “continuing violation doctrine” as an equitable doctrine that can toll the statute of limitations where a pattern of conduct constitutes a sufficiently integrated pattern to form, in effect, a single act. The court previously applied continuing violating doctrine in continuing trespass claims and employment discrimination claims under the Minnesota Human Rights Act; however, the court clarified these contexts are not exclusive areas for application of the doctrine. Both the Minnesota Supreme Court and the United States Supreme Court have recognized the continuing violation doctrine does not apply when the conduct at issue constitutes discrete acts. The Minnesota Supreme Court has also recognized that discrete acts are separately actionable when committed. Because the acts of retaliation that Ringsred alleged were discrete acts, each would have been actionable when committed. The court reasoned that the wrongful nature of each act of retaliation Ringsred alleged were complete and known at the time the city committed the act. Thus, the retaliatory acts alleged did not constitute a continuing violation sufficient to toll the statute of limitations. The court reversed the court of appeals’ decision and returned the case to the district court for further proceedings.

Ringsred v. City of Duluth, 995 N.W.2d 146 (Minn. 2023). Note: The League filed an amicus brief in support of the City of Duluth.

TAX LAW
Special assessments

The City of Brainerd issued a special assessment against James M. Carlson’s property for $1,700 to reconstruct a street. Carlson’s property is located on a cul-de-sac that connects to the street. The city hired a consulting firm to conduct an appraisal of Carlson’s property. The appraisal issued a report that “outlined market benefit” from the street improvements for “several classes of properties” that had direct and indirect access to the street. The City Council approved three property classes to issue a special assessment. The appraisal report used four comparable properties and stated the market value of appellant’s property increased by $5,000 after the city completed improvements to the street. At trial, a consulting firm employee testified that not every detail on the underlying calculation went into the report, his calculations were correct, and he could have included more information about how he did his calculations.

Carlson filed a complaint against the city seeking judicial review of the special assessment against his property. After a bench trial, the district court affirmed the assessment against his property and Carlson appealed. The Minnesota Court of Appeals affirmed the decision, finding the district court did not err by determining that the city’s special assessment was presumptively valid. The court relied on case law, which holds that introducing the assessment roll, or a public record containing the information about property and individual pieces of land, into evidence constitutes prima facie — sufficient at first impression — proof that the special assessment does not exceed the special benefit. An appraisal of property is not required to be completed before the assessment is imposed for the presumption to apply once the assessment roll is introduced into evidence.

The court also found the district court did not err by determining that Carlson failed to rebut the presumption of validity when the appellant testified and contradicted the appraisal report. Generally, Carlson’s lay testimony concerning the property’s value may be sufficient to rebut the presumption of validity. The district court can give substantial weight to the property owner’s testimony if the property owner’s experience and background warrants such weight. Here, Carlson had experience as a former practicing corporate attorney and had a brokerage license from 1975 to 1979. However, Carlson was not a real estate professional, had no formal appraisal training, did not buy and sell land on a regular basis, and was not an expert. Although Carlson testified and contradicted the change to his property’s market value, the district court did not err by determining Carlson failed to “introduce competent evidence” that the special assessment exceeded the increase in his property’s market value.

Carlson v. City of Brainerd, No. A22-1624 (Minn. Ct. App. Oct. 30, 2023) (nonprecedential opinion).

EMPLOYMENT LAW
Property interest

Samantha LaCoe was hired in January 2021 as a law enforcement officer for the Sisseton Police Department, in South Dakota. LaCoe and the city signed a Sisseton Police Department employment contract requiring LaCoe to reimburse the city for the cost of her training if she left the department before completing 36 months of employment. In January 2022, the department informed LaCoe the police commission lost confidence in her because she had included false or inaccurate information on four stopped-vehicle reports. Later, LaCoe resigned after the department asked her to.

In July 2022, LaCoe filed a 42 U.S.C. Section 1983 action. LaCoe alleged the city and other defendants violated her Fourteenth Amendment procedural and substantive due process rights by disciplining and constructively discharging her from her job as a law enforcement officer. The district court granted the city’s motion to dismiss all federal claims and declined to exercise supplemental jurisdiction over the plaintiff’s state law claim. LaCoe appealed for review of only the dismissal of her due process claims, arguing that the terms of the contract established a property interest and therefore she was not an at-will employee under South Dakota law.

The U.S. Court of Appeals for the Eighth Circuit affirmed the district court’s decision and ruled the existence of an employment contract does not automatically establish a due process property interest under South Dakota law. The city expressly reserved its statutory at-will termination rights in Section 6 of the agreement. The Supreme Court in South Dakota has repeatedly held that a contract of employment, whether express or implied, overcomes the statutory at-will relationship only when it “affirmatively indicates” the employer’s intent to surrender its at-will power to terminate an employee for any time and for any reason. The court clarified that Section 3 of the contract referred to the amount of time LaCoe had to work for the department to avoid repayment of training costs and not a period that the department had to employ her. Under South Dakota law, the employer’s intent to contractually surrender its at-will power must be clear and as applied here, the city reserved its right in Section 6. Overall, the court found LaCoe was an at-will employee under South Dakota law and had no due process-protected property interest in continued employment.

LaCoe v. City of Sisseton, 82 F.4th 580 (8th Cir. 2023).

Written by Aisia Davis, research attorney with the League of Minnesota Cities. Contact: research@lmc.org or (651) 281-1271.